PATH, Fueled by Bill Gates’ Fortune, Builds Global Health Hothouse in Seattle

2/4/09Follow @xconomy

Bill and Melinda Gates don’t give their money away to just anybody who comes along with an impressive resume and a good cause. So why has the world’s largest charitable foundation seen fit to give $1.3 billion of its fortune to a little-known Seattle-based nonprofit called PATH?

PATH, which has raked in the second-largest amount of Gates Foundation grants of any organization behind the vaccine group GAVI, is one of the biggest success stories of the Seattle innovation community in the past decade. Since CEO and president Chris Elias joined in September 2000, PATH has grown from 240 employees to 775. Its annual budget has soared from $41million to $240 million. It has formed partnerships with 60 biotech and pharmaceutical companies, and most public health bodies in the world that count, from the World Health Organization on down.

The organization, formerly known as the Program for Appropriate Technology in Health, sometimes struggles to explain what it does in a tight little Madison Avenue slogan. But essentially it seeks out clever, affordable technologies, and partnerships with clever entrepreneurs, to help improve the health of have-nots around the world. This vision plays itself out in a dizzying number of ways. PATH finances promising vaccine candidates, whether it’s for bird flu or other infectious bugs like pneumococcal disease that kills infants. It is working with entrepreneurs to develop fortified rice to so that people get more nutrition from a staple food. It is developing practical ways to purify water. It is helping ensure doctors get trained in a cheap, simple way to fix broken bones, so that people don’t languish in traction for months. It has pioneered the use of a sticker on vaccine vials that changes color if a vaccine goes bad. It serves as clearinghouse for the Gates Foundation-funded effort to eradicate malaria from the globe.

“We’ve really kind of grown up together with the Gates Foundation,” says Elias, whom I visited in his office. “We’ve grown dramatically.”

PATH got its start in Seattle in 1977 with a grant from the Ford Foundation to try to implement new contraceptive technologies that were developed for rich countries, but weren’t getting where they were needed in poor countries, Elias says. By about 1980, PATH’s founders realized that applying its model—of brokering deals between for-profit companies with innovative ideas and public health agencies with the means to get them to people in need—was a model that might work for expanding the use of diagnostics, drugs, devices, vaccines. Almost two-thirds of its budget comes from foundations, and the next biggest percentage, about 21 percent, comes from the U.S. government.

The people at PATH spend their time thinking about something most people in the U.S. are fortunate enough to never even consider—how to meet basic human health needs that the free market is unable to fulfill.

“The markets are very efficient ways of producing innovation where they work, where there’s a predictable demand and a system for delivery and financing. As imperfect as it is here in the U.S., that exists,” Elias says. “In poor countries, the market often fails. Either the market is unpredictable, or it’s not there. People are too poor. People who live on $1 a day can’t afford to buy products that will make anybody a significant margin.”

So there you have it, one of the world’s biggest fundamental problems, creating an enormous gap between haves and have-nots. Unsolvable, right?

They don’t seem to think so at PATH. In the face … Next Page »

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